Majors Group Australasia Pty Ltd v Ghiringhelli
[2025] WASC 61
•4 MARCH 2025
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: MAJORS GROUP AUSTRALASIA PTY LTD -v- GHIRINGHELLI [2025] WASC 61
CORAM: HOWARD J
HEARD: 24 FEBRUARY 2025
DELIVERED : 24 FEBRUARY 2025
PUBLISHED : 4 MARCH 2025
FILE NO/S: CIV 1140 of 2025
BETWEEN: MAJORS GROUP AUSTRALASIA PTY LTD
Plaintiff
AND
MAURO GHIRINGHELLI
Defendant
Catchwords:
Civil Procedure - Interlocutory injunction - Application for an injunction restraining former employee of the plaintiff from engaging in the business of a competitor of the plaintiff - Restraint of trade - Whether balance of convenience favours grant of injunction - Turns on own facts
Legislation:
Nil
Result:
Application granted
Category: B
Representation:
Counsel:
| Plaintiff | : | Mr S Rogers |
| Defendant | : | Mr N Ekanayake with Ms D Swain |
Solicitors:
| Plaintiff | : | T Squared Legal |
| Defendant | : | Bennett |
Case(s) referred to in decision(s):
Talent Konnects Pty Ltd v Marvelli [2022] WASC 128
HOWARD J:
(This judgment was delivered extemporaneously on 24 February 2025 and has been edited from the transcript)
Introduction
This is an application which was brought on 11 February 2025 as a matter of urgency.
The matter first came before me on 14 February 2025 and, at the conclusion of that hearing, I made orders that, upon the plaintiff proffering an undertaking as to damages properly executed in the usual terms:
1.Until 25 February 2025, or until further order of this Honourable Court, the defendant must not:
(a) engage or prepare to engage (directly or indirectly) in a sales executive equipment role with Invidia Foods Pty Ltd (ACN 629 635 365);
(b) solicit, canvas, approach or accept any approach from any of the plaintiff's clients identified in paragraph 22 of the affidavit of Anthony Colin Venema made and filed on 11 February 2025 ('Mr Venema's affidavit') with a view to obtaining the custom of that person in a business that is the same or similar to the plaintiff;
(c) interfere with the relationship between the plaintiff and any of the plaintiff's clients identified in paragraph 22 of Mr Venema's affidavit, or with the plaintiff's employees or the plaintiff's suppliers;
(d) induce or assist in the inducement of any employee of any of the plaintiff's clients identified in paragraph 22 of Mr Venema's affidavit or any employee of the plaintiff to leave their employment; or
(e) use any confidential information that he has or had access to as a result of his employment with the plaintiff or allow or facilitate its unauthorised disclosure or use by any other person including but not limited to Invidia Foods Pty Ltd (ACN 629 635 365) by its agents, officers, or employees.[1]
[1] Orders of the Honourable Justice Howard made on 14 February 2025 (Earlier Orders).
At that time, the plaintiff had filed what became the first affidavit of Mr Venema, made and filed 11 February 2025 (First Venema affidavit).
The matter came back before me on 24 February 2025.
The plaintiff had supplemented its evidence with a second affidavit of Mr Venema made and filed 18 February 2025 (Second Venema affidavit). There were some relatively limited objections made to that, and I heard those objections and ruled on them in the course of the hearing.
Before the hearing on 24 February 2025, the defendant had filed an affidavit made by himself on 21 February 2025 and filed on the same day. I also have the advantage of the defendant's written outline of submissions which were filed on 24 February 2025.
I am only going to recite those facts which are necessary to the decision I have reached.
Background
In broad terms, the defendant was employed by the plaintiff from about 2012, and his original employment contract was in evidence.
That employment ended on about 7 February 2025 and he has joined a competitor of the plaintiff. There was some debate on the defendant's part as to whether the company which the defendant has joined, Invidia Foods Proprietary Limited (ACN 629 635 365) (Indivia), was a competitor, but I am satisfied for present purposes that Invidia is, relevantly, a competitor of the plaintiff.
The contract which is relevant to current proceedings was entered into on 24 July 2015 (Contract).[2]
[2] Affidavit of Tony Venema made and filed on 11 February 2025 (First Venema affidavit) [12] and Attach 'TV-1' page 30 and continuing.
Background A to the Contract reads as follows:
A.The Employer has agreed to appoint the Employee and the Employee has agreed to serve the Employer in the position outlined in Item 3 of Schedule 1.[3] (original emphasis)
[3] First Venema affidavit [12] and Attach 'TV-1' page 31.
Clause 7.1 of the Contract reads:
7.1The Employee's principal place of employment will be at the location outlined in Item 8 of Schedule 1, or as otherwise reasonably requested by the Employer.[4] (original emphasis)
[4] First Venema affidavit [12] and Attach 'TV-1' page 33.
Clause 13 of the Contract deals with the maintenance and use of confidential information, as follows:
13.CONFIDENTIAL INFORMATION
13.1The Employee agrees to maintain the confidence of any Confidential Information that the Employee has access to or becomes aware of during the course of employment and agree to prevent its unauthorised disclosure or use by any other person.
13.2The Employee agrees not to use the Confidential Information for any purpose other than for the benefit of the Employer during or after their employment with the Employer and agrees to return any and all Confidential Information on request by the Employer.[5] (original emphasis)
[5] First Venema affidavit [12] and Attach 'TV-1' page 34.
In addition to the clauses of the Contract pertaining to Confidential Information as outlined immediately above, there was also a confidentiality deed entered into between the parties. That confidentiality deed was before the Court and was dated 4 August 2015 (Confidentiality Deed).[6]
[6] First Venema affidavit [14] and Attach 'TV-2' page 42 and continuing.
Under the title 'Restraint', cl 17.1 of the Contract reads:
17.1During the Restraint Period outlined in Item 14 after the termination of the Employee's employment, the Employee must not anywhere in the Restraint Area outlined in Item 15:
a.engage or prepare to engage (directly or indirectly) in a business that competes with the Employer;
b.solicit, canvass, approach or accept any approach from a Client with a view to obtaining the custom of that person in a business that is the same or similar to the Employer;
c.interfere with the relationship between the Employer and its Clients, employees or suppliers; or
d.induce or assist in the inducement of any employee of the Client or the Employer to leave their employment.[7] (original emphasis)
[7] First Venema affidavit [12] and Attach 'TV-1' page 37.
Clause 22 of the Contract reads:
22.SEVERABILITY
If any of the terms and conditions of the Contract are void, or become voidable by reason of any statute or law then that term or condition shall be severed from the Contract without affecting the enforceability of the remaining terms and conditions.[8] (original emphasis)
[8] First Venema affidavit [12] and Attach 'TV-1' page 38.
Schedule 1 of the Contract provides relevantly as follows:
…
Item 3
Position
Sales Executive Equipment.
The duties of the position are outlined in the Sales Executive Equipment Position Description
…
Item 8
Location
VIC
…
Item 10
Remuneration
$80,000 per annum plus superannuation
Item 11
Vehicle Allowance
$15,000 per annum (refer to Schedule 2 clause 26 of this Contract)
…
Item 14
Restraint Period
The higher of the following:
a) 12 months;
b) 6 months;
c) 3 months;
d) 1 month.
Item 15
Restraint Area
The greater of the following:
a) The whole of Australia and its territories; or
b) Western Australia and the State or Territory you predominantly work if this is not Western Australia;
c) Western Australia.
…[9] (original emphasis)
[9] First Venema affidavit [12] and Attach 'TV-1' page 39.
As seen, Item 3 of the schedule to the Contract referred to a Position Description. That document was before the Court and appears to be dated 4 August 2015 (Position Description).[10] Although it is dated subsequently to the Contract, nonetheless, it appeared to be common ground between the parties that I should read that Position Description with the Contract.
[10] First Venema affidavit [19] and Attach 'TV-3' page 46 and continuing.
From the Position Description, a number of matters are apparent.
The first is that the title of the defendant's position was 'Sales Executive Equipment' and that the defendant reported to a 'Sales and Administration Manager'. They indicate that the role was more focused on sales than the plaintiff's administration per se.
Notwithstanding the submissions by counsel for the plaintiff that the Position Description was not directed at equipment sales, for present purposes I think the better view is that the position as at July and August 2015 was focused on sales and, in particular, a customer or client‑facing role.
In reaching that preliminary view, I have taken into account the position summary in cl 1.1 and the references to equipment sales, activities and the like in cll 2.1b, 2.2c, 2.3a, 5.1 of the Position Description.
Under cl 1.1, the position is summarised as follows:
1.1The Sales Executive Equipment is responsible for liaising with existing and potential customers in relation to equipment sales, including answering all customer queries, performing demonstrating and finalising equipment sales deals.[11]
[11] First Venema affidavit [19] and Attach 'TV-3' page 46.
Clause 2 sets out the duties and responsibilities of the position, and I note particularly:
2.1 DRIVING SALES DUTIES
…
b.Responsible for the development and performance of all equipment sales activities within the designated region and/or territory;
…
2.2FINALISING SALES DUTIES
…
c.Follow up with existing and potential customers to ensure all of the equipment needs are satisfied at all times;
…
2.3 GENERAL SALES DUTIES
a.Prepare quotes for customer consideration, in accordance with designated budgets and sales targets and/or quotas;
…[12] (original emphasis)
[12] First Venema affidavit [19] and Attach 'TV-3' page 46 - 47.
Clause 5.1 stipulates, as a knowledge, skill and competency requirement, 'passionate and enthusiastic about equipment and equipment sales'.[13]
[13] First Venema affidavit [19] and Attach 'TV-3' page 47.
I accept it is possible to read the position description as encompassing both equipment sales and a broader role, but it is clearly not designed to be a technical document. And in an ordinary reading, as I said, for present purposes, I consider the better reading is that it was directed to equipment sales and the defendant having a customer-focused role.
So much is supported by Mr Venema's first affidavit, in which he deposed to:
1.the defendant being employed by the plaintiff in July 2015, as a Sales Executive of equipment in State of Victoria and reporting, at that time, to the sales and administration manager;[14]
[14] First Venema affidavit [10].
2.the defendant's duties, as sales executive, including liaising with existing and potential customers in relation to equipment sales, and performing, demonstrating and finalising equipment sales, being responsible for the development and performance of all equipment sales activities, assisting with the development of new business opportunities through sales and marketing initiatives, maintaining and developing new and existing customers towards business growth, and supporting and engaging in all marketing activities;[15]
3.during his employment, the defendant having progressed in seniority in customer relations and being the sole equipment sales executive for the defendant's operations from 2015 to February 2025;[16]
4.given the nature of his senior position and length of his employment, during the period of his employment, the defendant had access to the plaintiff's customers with whom he had significant dealings and with whom he formed strong working relationships;[17]
5.the plaintiff seeking to have:[18]
a.sufficient time to enable another senior employee to establish the relationships with customers that the defendant previously had;
b.sufficient time to rebuild expertise for a new employee to undertake the duties performed by the defendant;
c.the plaintiff's confidential information protected including the likelihood of the defendant recalling contact details and names of the customers that he had been dealing with whilst employed by the plaintiff; and
6.the position held by the defendant being integral in facilitating the sale of equipment to customers of the plaintiff, and the defendant was the main contact with customer of the plaintiff.[19]
[15] First Venema affidavit [17].
[16] First Venema affidavit [20].
[17] First Venema affidavit [21].
[18] First Venema affidavit [35].
[19] First Venema affidavit [36].
Some of the evidence given by Mr Venema, however, seemed to suggest a role of the defendant which went beyond what I consider to be, for present purposes, the more natural reading of the Contract and the Position Description. In that respect, I note that Mr Venema deposed to:
1.the defendant having been an intrinsic part of the plaintiff's expansion to its national operations strategically, the relationships that he developed and maintained with the plaintiff's suppliers and customers having been key to the success of the plaintiff, and having negotiated on behalf of the plaintiff with its suppliers, under instructions from Mr Venema;[20]
2.the defendant's familiarity with the plaintiff's pricing structures and incentives in place in respect of business ingredients;[21] and
3.the defendant having worked across the whole range of the industry, and across the entire range of the plaintiff's business sales departments, including selling the equipment and ingredients, overseeing the ingredients staff in developing recipes, and assisting clients to create the end-of-line retail products.[22]
[20] Affidavit of Tony Venema made and filed on 18 February 2025 (Second Venema affidavit) [22].
[21] Second Venema affidavit [50].
[22] Second Venema affidavit [56].
The test at law, as will be seen, is focused on the time of the entry into the Contract and the Position Description at that time. And it seems to me that, without deciding it, Mr Venema's evidence of the type that I have just identified immediately above goes beyond the Contract and Position Description.
I also consider that Mr Venema's evidence about the defendant's centrality to the plaintiff's business and his seniority within the business is, with respect, not immediately persuasive on the evidence presented.
And while it is not determinative by itself, the remuneration that was provided for in the Contract at Items 10 and 11 of Schedule 1 (as I have identified at paragraph 17 above) does not suggest, on their face, an employee with the sort of role and responsibilities to which Mr Venema deposes.
The defendant, in his affidavit, gave evidence as to what his new role will be by at Invidia, including that:
1.he will not be required to be in direct sales of equipment which, he says, is conducted by other Invidia staff;[23]
2.he accepted employment with Invidia as a general manager of the business;[24]
3.his duties would include setting operation policies, creating and maintaining budgets and managing employees;[25] and
4.his role would not be limited to growing a specific arm of the business but rather would be in a more senior role to his previous employment with the plaintiff.[26]
[23] Affidavit of Mr Ghiringhelli made and filed on 21 February 2025 (Ghiringhelli affidavit) [29].
[24] Ghiringhelli affidavit [29(b)].
[25] Ghiringelli affidavit [29(b)].
[26] Ghiringhelli affidavit [29(b)].
A fair reading of that evidence suggests to me that the defendant is deposing to not having a client or customer-facing role with his new employer. I accept that there is a dispute on the evidence between Mr Venema and the defendant as to what the defendant admitted to Mr Venema and, in particular, as to what he admitted about having a client or customer-facing role.
I cannot resolve that now. Certainly, it seems that, relevantly, it is the customer-focused role which the defendant had with the plaintiff as I have found that, for present purposes, is the most relevant.
Relevant legal principles
I adopt for present purposes the principles enunciated by his Honour Tottle J in Talent Konnects Pty Ltd v Marvelli[27] concerning the enforcement of restraints. They are, as submitted by the defendant in his written submissions, as follows:[28]
1.a restraint of trade clause is contrary to public policy and prima facie void, unless the restraints are reasonable to protect the legitimate interests of the party seeking to enforce the restraint;
2.the validity of a restraint is to be considered as at the date of the contract;
3.courts take a stricter and less favourable view of restraints in employment contracts that in other commercial contracts; and
4.an employer is not entitled to be protected against mere competition.
[27]Talent Konnects Pty Ltd v Marvelli [2022] WASC 128 [51] - [54].
[28] Defendant's written submissions dated 24 February 2025 (Defendant's submissions) [8].
I note that the parties proceeded on the basis that those principles are correct.
The principles to be applied on interlocutory injunction are well known: that is, the applicant must establish that there is a serious question to be tried and that the balance of convenience favours the grant of the interlocutory relief.
It is clear on the authorities that those two are interrelated such that the more compelling the serious question appears to be, the less the balance of convenience needs to be weighted in favour of the grant. But the reverse is also true, which is that if the consequences are dire (of the injunction not being issued), then less will be required in establishing the serious question to be tried.
Consideration
The defendant here accepts that there is a serious question to be tried. I say without criticism that he does so without identifying exactly in which way or in which respects. But there is a dispute as to where the balance of convenience lies.
Looking at cl 17 of the Contract (as quoted at paragraph 15 above), there is, in my view, clearly a serious question that the defendant may breach cll 17.1(b) to (d) without being restrained.
Further, I consider that there is a serious question in favour of the restraints in terms of cll 17.1(b) to (d) being necessary and were necessary to protect the legitimate commercial interests of the plaintiff at the time of the Contract.
There also remains the question as to the period of time and the area of the restraint. One cannot look at cl 17.1 without bearing in mind that the restraints it contains are for the defined Restraint Period and for the Restraint Area as appear in Items 14 and 15 of Schedule 1 to the Contract.
It was not suggested that the defendant could not do his new role without breaching cll 17.1(b) to (d); that is, it appears to be accepted that the defendant can perform his new role while being restrained in those terms, although, as I said, it is necessary to come to consider the Restraint Period and the Restraint Area.
That leaves, of course, the restraint in cl 17.1(a). That restraint is widely drawn and would capture, at the time of entering into the Contract, arguably any role in a business which competed with the plaintiff. Arguably, as drawn, it is beyond the legitimate business interests where the defendant was 'only' employed as an equipment sales executive by the plaintiff.
I am not determining that cl 17.1(a) goes beyond protecting the legitimate business interests of the plaintiff. Rather, it seems to me that it is a weaker argument or question to be tried (from the plaintiff's perspective) as I presently assess it. It is partly by reference to those sorts of considerations that I made Order 1(a) in the terms that I did on 14 February 2025.
I made that Order because it seemed to me, and it still seems to me, that the restraint in cl 17.1(a), if it were limited to the defendant doing a job for the competitor which is the same or similar, or involves the same activities as he was doing for the plaintiff, then the case for restraint is much stronger.
I accept that it is arguable, as the plaintiff submitted, that a restraint in the form of cl 17.1(a) is necessary to protect the legitimate interest which I have identified as being arguable immediately above because it provides the sort of protection from indirect activity of the defendant for the new employer.
While I have found that the better reading for present purposes is that the Contract was for the role of the defendant to be directed to customers of the plaintiff. It remains arguable, in my view, that the Position Description, in particular, identified a role of the defendant to interact with suppliers to the plaintiff of equipment.
It is not, in my assessment, as strong an argument as a restraint directed to customer-focused activities, but nonetheless, it is arguable.
The legitimate interest that I consider may be protected and which has been principally identified in the evidence is the personal connection with the customers (and suppliers) that the defendant has developed while being held out by the plaintiff, and which the plaintiff cannot immediately replace.
That is commonly the case where the employee has a sales-based role. But on the evidence, it also appears that there may be a personal connection between the defendant and suppliers to the plaintiff, as evidenced by the evidence of Mr Venema of the trip undertaken by the defendant to Italy while he was still employed by the plaintiff for the benefit of his new employer.
The protection of that legitimate commercial interest (to protect, as it were, the personal connection) informs, in my view, the period about which there is a serious question. That is, a plaintiff is not entitled to be protected from competition from a former employee per se.
But where the plaintiff has, as I am prepared to accept is arguable here, put an employee forward and necessarily supported them and built their credibility, then a reasonable time that would protect the legitimate commercial interest, would allow the plaintiff to find, employ, and then promote a new person to its customers or suppliers.
That suggests to me no more than six months on the basis that a new person may have to give notice from current employment after an employment process had been gone through. They need to be inducted into the plaintiff's business, and then some time for relationship building and the presentation of that new person needs to be allowed for.
The question of area - the Restraint Area is more difficult in the sense that it appears that while the principal place that the defendant was based was Victoria, it was always anticipated that he would have or could have a role outside of Victoria. And in the modern world, and as Mr Venema deposes, it appears that the defendant has had a role outside of Victoria, including by electronic means.
The consequence of that is that the orders that I am going to make seem to me to implicitly include within them a geographical restraint. But if I have to identify which of the cascade of Restraint Areas that the balance of convenience favours, then I would nominate (a) in the Restraint Area in the Schedule to the Contract.
But as I say, the form of the orders that I am going to make are effectively geographically limited.
The last Order that I made on 14 February 2025 restrained the use of confidential information. That Order was directed, obviously enough, to protect the confidential information which was specifically agreed to in the Contract, but also was agreed to in the Confidentiality Deed.
The plaintiff did not identify with precision exactly the information which it was seeking to protect. But it does appear from the evidence that the defendant had confidential information of a certain kind, or access to it through his 'phone. His evidence about what occurred with his 'phone is not, for present purposes, immediately satisfactory or persuasive, and seems to me that I ought continue to make an order in those terms.
Orders to be made
What I proposed, looking at the Orders that I made on 14 February 2025, is that the orders would effectively be amended in the following way:
1.in the chapeau to Order 1, the date be amended to 7 August 2025.
2.in Order 1(a), after the ACN number for Invidia, adding the words 'including not engaging directly or indirectly with any supplier of equipment which had supplied equipment to the plaintiff before 7 February 2025'.
As I noted in the course of argument, Order 1(a) that I made on 14 February 2025, and Order 1(a) as amended, do not reflect exactly the wording of cl 17.1(a) of the Contract.
On an application for final relief, there may well be an argument as to whether it is in the Court's power to, in effect, modify a contractual obligation. I do not think the same consideration applies on an interlocutory injunction where, in my view, I am able to fashion the injunction in a way which seeks to balance the competing 'conveniences' - understanding that is something of a term of art rather than having its more usual meaning - pending a trial.
The defendant complains about delays on the part of the plaintiff in commencing these proceedings, and in commencing substantive proceedings to vindicate its rights. I think there is some force in those criticisms. That has not assisted the plaintiff in establishing that the order should be made differently from the orders I proposed to make. It seems to me that the plaintiff ought not be able to take the benefit of an interlocutory injunction without now commencing and expediting proceedings.
In addition to Orders 1(a) to (e) that I made on 14 February 2025, I made a further order that the plaintiff was to commence proceedings by 4.00 pm on 27February 2025, and was to seek to expedite those proceedings as much as practicable.
I did not order it, but I made it clear that I expect that the plaintiff will inform the Supreme Court Registry, on the filing of the writ, that the matter should be referred immediately to my Chambers, for the matter to be managed. It may well be that there are relatively limited areas of factual dispute and the proceeding can be determined relatively quickly, but nevertheless I made orders at the conclusion of the hearing that there be liberty to apply.
And, of course, if the defendant at any point wishes to contend that the matter has not been sufficiently expedited and wishes to seek a discharge of the injunction on that basis, then he can bring application to do so.
I noted that nothing I ordered at the conclusion of the hearing would preclude the parties from reaching an agreement which spared the parties from embarking on expedited proceedings that neither wish to have determined.
Finally, I made orders that costs will be in the cause of the proceedings which I have ordered to be commenced.
If the parties reach a different agreement as to costs, then they may submit orders which reflect such an agreement.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
TM
Associate to Justice Howard
4 MARCH 2025
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